Just a few comments:
1. Valuation. Yes, the figures stated by Christian indicate a pre-money valuation of $2 million. I don’t have the specifics of this situation but on the surface I don’t view this as a ridiculously high number. I don’t mean to say that if one marched into a venture capital firm with just an idea –they would agree with the valuation. However, we have helped many fledging companies acquire equity capital where the valuation (implied or stated) was higher.
2. Voting rights. In practice having 15% of the outstanding common stock in a company – gives one very little “say in the operations”. It might not even be enough to secure “representation” on the board.
3. Generally lenders don’t have a say in the operations in a general way. They may place some limits or restrictions on certain transaction but that is a point of negotiation.
4. From the lenders perspective, I would be much more concerned about the ability of the company to service the debt than the voting rights.
5. Finally in response to the original question (How does this sound) – I think it will be a challenge to “sell”. The deal is neither “fish nor fowl” because it’s not a (seemingly) good loan proposal nor is it a solid equity opportunity.
6. I think there are better ways to acquire the capital with less challenges.
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